Can I get arrested for a Cheque Bounce in India?

Date : 11-02-2019 10:37

Can I get
arrested for a cheque bounce in India?

A
cheque is said to be dishonoured or bounced when it is presented for
payment to a bank but it is not paid because of some reason or the other.Cheque
bounce is a criminal offence in India,
covered under section 138 of the Negotiable Instruments Act.

You
must obtain anticipatory bail from
the District Court or High Court, if
the opposite party lodges a complaint against you and the same was registered
as a crime in the concerned police station. Then the police authorities will not arrest you. Another option is you must
go the police station when the
police authorities call you and answer their queries and after enquiry if any crime is registered and take you
into custody, you must obtain bail
from the concerned magistrate before
whom you were produced. Don`t worry.
There are so many options for you. Generally Police Authorities will not entertain any case that fall under Section : 138 of Negotiable Instruments Act as there is no mens Rea ie., criminal
intent to cheat the opposite party.
Take expert legal advice of experienced
advocates, they will guide you in an appropriate
way.

Only
option to the bearer of the cheque is to follow the provision of section 138 of NI act.There are few steps to follow by the complainant.

(1) The cheque should be within 3 months.

(2)
15 days notice to be given after dishonour of the cheque by the banker.

(3).if
the accused not paid the amount if at all due ( legally enforceable debt),then
he has to fail the complaint before the competent criminal court under its jurisdiction within 30 days.Here the
police cannot either take any complaint nor take action. Lawtendo can help you with this.

Immediately
upon dishonour the drawee bank issues a ‘Cheque
Return Memo’ to the banker of the payee citing the reason for
non-payment. In turn the payee’s banker
shall handover the dishonoured cheque and the memo to the payee.

Under
Section 138 of the Negotiable Instruments Act, 1881 as
amended up to date, the notice has to be sent by the payee to the drawer in
writing within thirty days from the date of receiving Cheque Return Memo from
the bank and demand the cheque amount to be paid to him within fifteen days from the date of receipt
of such a notice by the drawer.

CONDITIONS FOR PROSECUTION

Law prescribes certain conditions to
be fulfilled in order to attract provisions of Section 138.

A) The cheque should have been drawn
by the drawer on an account maintained by him.
B) It should have been returned
unpaid either because of the amount of money standing to the credit of that
account is insufficient to honour the cheque or that it exceeds the amount
arranged to be paid from that account by an agreement made with that bank.
C) Cheque must have been issued
towards discharge of a debt or legal liability.
D) If after receiving the notice, the
drawer does not make payment within fifteen days from the date of receiving
such a notice, then he commits an offence punishable under Section 138 of the
Negotiable Instruments Act.

PUNISHMENT

Punishment prescribed for such an
offence is fine which may extend to twice the amount of the cheque or
imprisonment for a term which may be extended to two years or both.

FILING COMPLAINT

If the drawer makes payment of the cheque amount within fifteen days from the
date of receipt of the notice, then drawer does not commit any offence. Otherwise, the payee may proceed to file a
complaint in the court of the jurisdictional
magistrate within one month from the date of expiry of fifteen days
prescribed in the notice.

If the payee fails to file the complaint within thirty days, the complaint
becomes barred by limitation of time.
The jurisdictional magistrate
court may refuse to entertain such a belated complaint. However, if the payee has sufficient reasons
to justify delay in filing the complaint, he may make an application before the
magistrate along with the complaint, to explain the reasons for delay and seek
condoning of delay. Cognizance of the complaint may be taken if the Court is satisfied
that the payee had sufficient cause for not making the complaint within the
prescribed period.

After the complaint is filed and taken on record the proceedings against the
drawer being.

The payee may also initiate money recovery procedure in a jurisdictional civil
court apart from prosecuting the drawer for criminal offence. It is essential in this case to consult an
advocate who is well versed and experienced in this area of practice to proceed
further in the matter.

The procedure of filing complaint and prosecuting the drawer in a court of
magistrate involves certain finer points like cause of action, preparation of
legal notice and complaint in accordance with legal requirements, modes of
sending the written legal notice, service of summons and non-bailable warrants,
conducting the criminal case etc. It is
advisable to consult an advocate who is well versed and experienced in this
area of practice.

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